Birmingham-based Gatecrasher – which once boasted of its goal to be the world’s greatest nightclub – has gone bust after its owners amassed debts of more than £3.5 million.

The Broad Street venue is one of four UK clubs which entered into “pre-pack administration” after being saddled with multi-million pound debts - including £3 million to Barclays and £500,000 to the taxman.

The club, due to celebrate its fifth birthday next month, now aims to continue under a newly formed limited company called Gatecrasher (Birmingham) Ltd.

A report by administrators Duff and Phelps said the previous business – which operated under the names Tiptoptap Ltd and Late Night Watford Ltd – had chalked up operating losses of £1.1 million from June, 2012, to March 31, 2013.

“Recessionary economic factors and continued competition in certain locations put pressure on bar prices and entrance fees,” the report states.

“This made it difficult to maintain attendance levels, causing the companies to incur losses. The companies owe in excess of £500,000 to HM Revenue and Customs and are unable to pay debts.”

Gatecrasher runs clubs in Leeds, Nottingham, Sheffield and Watford. It celebrated its 20th birthday in May with an event at Donington.

It is understood that the Leeds venue will close, but the Broad Street venue will continue to trade.

Two years ago, managing director Simon Raine said: “Gatecrasher began as a one-off party at the Engine Rooms in Birmingham.

"Our aim was, and remains, to own and operate the best nightclub in the world and the development of Gatecrasher Birmingham remains close.”

The club, with a capacity of 2,400, had opened on the site of the former Works venue in late 2008 following a £5 million facelift.

In a statement, Gatecrasher chief executive Mr Raine said over 300 jobs have been safeguarded.

“The transfer of the business to the new company, along with extensive corporate restructuring and refunding of the business, has enabled Gatecrasher to progress on a secure financial footing.

“The restructuring was the only option available to ensure the continued viability and growth of the business and also preserve jobs.”